Someof The Commonly Attributed Terms And Concepts Linked To Bpr Are The Following: Literature Review Example
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BUSINESS PROCESS REENGINEERING
CHAPTER TWO: THEORIES OF BUSINESS PROCESS EENGINEERING
This research study intends to analyze, record and reassess the business process and organization of Company XXX and directly utilize the concepts and tools of BPR to make a better and more management savvy organization and/or system. As such it shall expound on the BPR as a concept and a major theoretical percept in change management and in global business systems. As thousands of business organizations have trusted BPR to be their way to recovery and success, it is best to explore the concept of BPR as a great aid in organizational reengineering. It is best to distinguish its theoretical grounding in the world of business and management. It needs to be understood as a salient force in business problem solutions.
During the previous decades, business process reengineering (BPR) has secured its place in change management as a formidable aspect of management. Various companies faced severe problems in quality control and timely production and deliveries. Recommendations strongly pointed to the reforms in organizational systems, human resource alignments, and organizational structures (Debela & Hagos, 2011, p. 42).
• Business Reengineering
• Business Process Redesign
• Business Process Improvement
• Business Process Reengineering
As it is, the BPR concept is a conglomerate of theories from various disciplines (i.e. management, marketing, engineering, among others) (2011, p. 42). A multi-disciplinary approach and orientation will be best applied in this research so as to incorporate the varied premises and orientations from different fields. It can be inferred that the BPR theories are inter-related but then, as a conglomerate of theories, the theoretical origins and development of the BPR must be properly contextualzied to be effectively used in this case study and in the greater understanding of how effective and vital it is in change management.
2.2 Literature Review
2.2.1 Organizational Growth Theories
Michael Hammer, one of the founding fathers of the BPR and the originator of the term itself, defined BPR as the fundamental reconceptualization and dramatic reformat of business processes to attain higher enhancements in crucial, contemporary performance indicators, i.e. cost, speed, quality, services, and the likes (Tolbert & Hall, 2009, p. 15). In 1991, Prof. Hammer of the MIT Computer Science Department published a Harvard Business Review article wherein he stressed the importance of fundamental change in organizations and hence, initially coining the word, Business Process Reengineering (2009, p. 15).
This section shall contextualize the alignment of BPR with the fundamental organizational growth theories so as to inter-relate their importance within the organizational need for change. Basically, the globalized commercial systems require organizations and companies to constantly “re-engineer“ its systems and oeprations in order to cope up with the environmental dynamics and the demanded flexibility of today’s markets.
Hence, implementing BPR on an organization involves the reconfiguring of the processes, structures, and functions in an organization (Tolbert & Hall, 2009). It also involves the relocation of personnel and work adoptions in terms of titles, levels, and categorization (Tolbert & Hall, 2009). Hence, this section intends to introduce how BPR is well related to the concepts and theories of organizational growth and development, from the classical theories to the present organizational theories relating to BPR.
188.8.131.52. Classical Organization Theory
One of the best ways to contextualize organizational growth is to distinguish organizations from the point of view of their growth. Cameron, Whetten, & Kim (1983) assessed thirty life-cycle models from the organizational development sources. They summed up their studies into a complete model with four processes. Whetten (1987) points out that these theories are a reflection of the 1960s and 1970s, two highly growth oriented decades. This has been represented by the popular S curve which Land and Jarman (1992) tried to refine. These theorists argued that this curve is "natural" and deviations do not often survive.
The first, formal organization theory was developed in the first half of the 20th century (Jones, 2010, p. 30). It embodied the merging of scientific management, administrative and bureaucratic theories. In 1917, Frederick Taylor theorized on scientific management theory (usually referred to as "Taylorism") (2010, p. 30). Taylor’s theory was made up of four fundamental percepts: 1) seek the one "best way" to complete the task, 2) carefully counter each task with each worker, 3) vividly supervise workers and apply the reward-punishment scheme as primary motivators, and 4) apply the task of planning and control.
At the onset, Taylor was met with resounding success at improving the production system. His methods included the recruitment of the best human and technical resources and then slowly supervising the different aspects of the production process. By individually evaluating each task, Taylor was able to determine the right mix of factors which resulted to a dynamic increase in production (2010, p. 31).
The scientific management theory of Taylor showed imminent success in rudimentary industrialized companies at the turn of the 20th century. However, the theory did not fare well in the modernized systems of production in the later years. The principle of "production first, personnel second" has marked a tradition that led to decreased quality and production, work dissatisfaction, degrading confidence in workmanship, and an almost lost of organizational human resources (Daft, 2007, p. 28).
In 1947, Max Weber improved on the theory of Taylor and emphasized the need to lessen organizational diversity and ambiguity (2007, p. 28). His theory centered on making clear lines of authority and control. The bureaucratic theory of Weber stressed the need for a hierarchy in power structure (Mintzberg, 1993). It distinguished the significance of the division of labor and specialization. A formal list of rules was inputted into the hierarchy structure to ascertain steadiness and standardization (Mintzberg, 1993). Weber also impressed the concept of organizational behavior as a network of human interactions. It analyzed human behavior in terms of cause and effect (Mintzberg, 1993).
In 1931, Mooney and Reiley formalized the Administrative theory (such as the principles of management) (Pasmore, 2001, p. 39). It impressed on the need to create a universal list of management principles that is applicable to all types of organizations. As a whole, the classical theories were very mechanistic and crude. Its weaknesses were shown and it was mainly pinpointed at the economic motivation of the human resources.
184.108.40.206. Neoclassical Organization Theory
The classical organizational theories were then reoriented with the emerging importance of human relations as a reaction to the authoritarian and rigid structure of the classical theories. The neoclassical organization theories addressed the various problems borne out of the classical theory. The grave objections to classical theory included the development of over-conformity and rigidness, hence, stifling creativity, personal growth and motivation. The neoclassical theories emphasized on human needs and concerns over the perfunctory functions of organizations (Strunk, Schiffinger, & Mayrhofer, 2004).
In the late 1920’s, Mayo and Roethlisberger made a famous experiment which challenged the classical view of organizational growth. They conducted it in 1933 at the Western Electric plant in Hawthorne, Illinois (Senge, 2004, p. 43). As they were managing the working conditions in the plant, they discovered that any change made had a corresponding positive effect on productivity (2004, p. 43). They found out that the mere act of treating employees in a right manner was enough to improve production. In 1986, this was termed by Uris as the "Wart Theory" of Productivity (Uris, 1986, p. 225). Just like a wart, anything to treat it will make it go away or almost anything can be a potential enhancer of production. This plainly implied that “intelligent actions usually resulted to god outcomes" (1986, p. 225).
There was another experiment conducted by Hawthorne experiment. This was disturbing because it degraded the human potential to increase production as heralded by the neoclassical organization theories. The Hawthorne effects made erroneous generalizations of people who manage and control the work settings (Pascale, 2000, p. 103). In 1939, Barnard ushered the first modern organization growth theories by validating organization as a system of very overt and linked activities (Whetten, 1987, p. 30). Bernard emphasized the role of the management heads in developing a work setting where there is a unified goal and values. The success of an organization was linked to the leadership to successfully create a conducive work environment (1987, p. 30). He theorized that a leader’s authority stemmed from the workers’ acceptance as against the empowering positions of leaders in the hierarchical power structure (1987, p. 31). Barnard's theory was made up of the principles of both the classical and neoclassical theories. As there was no consensus among organizational theorists, it could be inferred that Barnard’s theory served as a transition theory in the development of organizational growth theories.
In 1945, Simon contributed to the study of organizations through his model of "limited rationality" which explained the experiment of Hawthorne (Whetten, 1987, p. 30). The theory explained that there is such as a thing as unpredictability when it comes to human behaviors. Hence, management control varied by this factor. The significance of Simon's work was the stringent application of scientific process. Hence, it validated the use of reductionism, measurement, and deductive logic as means of studying organizations (Pascale, 1990). To summarize, theorists like Taylor, Weber, Barnard, Mayo, Roethlisberger, and Simon all agreed that the purpose of management was to maintain balance in an organization (Knudsen & Tsoukas, 2009). The stress was on being able to manage and manipulate the employees or workers and the work setting.
220.127.116.11. Contingency Theory
Classical and neoclassical theorists both considered conflict in organizations as something to be avoided. However, the Contingency theorists considered it as inevitable yet can be managed. In 1962, Chandler studied four big American companies and theorized that an organization would inherently develop to fulfill the needs of its strategy (Stacey, 1996). It implied that form is a subset of functions. Implied in Chandler's notions was the central idea that organizations would act in a logical, sequential, and unitary way in order to adapt to the external environment. An organizational management needs to be effective to be able to adapt to external changes (Stacey, 1996). In 1969, Lawrence and Lorsch also theorized how organizations conformed to the environment. In very dynamic industries, they stressed the significance of authorizing the managers to decide over their realms. Managers are at liberty to decide on contingent matters at hand.
18.104.22.168. Systems Theory
Organizations are taken as open systems, persistently interacting with the environment. They are in a state of dynamic equilibrium as they adapt to environmental changes. This was originally theorized by the Hungarian biologist Ludwig von Bertalanffy in 1928 (Jones, 2010, p. 58). Around the 1970’s, systems theory has been applied to organizations (2010, p. 58). This theory is based on the assumption that all the parts of an organization are interlinked and the alteration of one factor might affect various aspects of the organization.
Systems thinking was defined by Senge (1990, p. 136) as the knowledge of how individual actions define reality. It fundamentally believes that an individual holds a vision that he/she can manage his future. Systems thinking helps people assess their actions because they know it determines their future (1990, p. 136)
Another major principle of the systems theory is that non-linear relationships describe the links between variables (1990, p. 136). A small change in one variable can cause big alterations in another and significant changes in one factor might have a small effect on another. The notion of non-linearity enhances the vast sophistication of understanding organizations. This is why scholars sometimes avoid this theory because of its difficulty or impossibility in full understanding of the relationships between variables (1990, p. 137).
22.214.171.124. Value Chain Concept
Michael Porter orginated the concept of adding value through his 1984 book, Competitive Advantage (Porter, 1980). He posited that each organization is a conglomerate of activities which are tasked to create, produce, market, deliver, and support its product. All these activities can be depicted using a value chain diagram. Value chains can only be learned through the business operations context. In the classical value chain diagram, an organizations' set of functions or activities form a linear flow from the suppliers to the clients (Porter, 1980). The value chain initially involved the main activities such as the tasks which a company does in order to exist. These tasks add direct value to the customer through the gods and/ or services and the strong impact of the linkages of these tasks to organizational performance.
The secondary tasks act as a support to the former, so as to ensure organizational and managerial control, synchronicity among the main tasks and to maintain and enhance a corporate culture inside the organization, and to establish a corporate image towards the environment. Their value-enhancement impact is indirect and only realized by the outcomes of the main organizational tasks.
The standard value chain model is a form of a business activity asessment. It is a means of tackling complicated organizational structures, aimed to manage the business organization into controllable parts for chnage management and further evaluation (Porter, 1980). What makes the value chain analysis special from the other organizational approaches: 1) distinction of main and secondary tasks; 2) emphasis on adding customer value; 3) relating the business-unit technique with strategic analysis and planning; 4) primarily concerned with organizational structures (Porter, 1980).
2.2.2. Organizational Structure
In the past, almost all organizations abided by Weber's structuralist concept of organization or bureaucracy. Systems theory considered organizational structure as the "created pattern of relationships among the varied units of an organization" (French, Kast, and Rosenzweig, 1985, p. 348). This organizational structure theory (as also defined under organizational growth theory above), particularly defined the significant patterns in relationships and tasks. These relationship included themes such as: 1) integration (the coordination of the tasks); 2) differentiation (the division of the tasks); 3) the structure of the hierarchical relationships (or the systems of authority systems); and 4) the formalized procedures, rules, and laws that guide the organization (systems of administration) (1985, p. 348).
Other structural theorists such as Fayol and Weber recognized the value of structure for effectiveness and efficiency (Jones, 2010). Organizational structure was taken as a matter of choice. During the 1930s, the contradiction of the tradiitonal theories emerged from the acknowedgment of the human relations theory. However, it was not denied that the idea of structure is not just an artifact but an advocacy of the establishment of a different type of a structure, which is characterized by the acknowledgment of its employees‘ needs, knowledge, and personal opinions. However, different views developed during the 1960s. It suggested that the organizational structure is "an outside causing factor, a result instead of an artifact“ (Jones, 2010).
Organizational structure is determined by its basic mission, management, communications, and decision making (Lim, Griffiths, & Sambrook, 2010). It has three dimensions which were defined by Robins as follows:
1.) Formalization – this refers to the quantity of jobs inside an organization. The most vital formalization processes are selection, requirements, roles, procedures and policies, and employees’ practices to show their commitment and loyalty to follow (Robins, 2008).
2.) Complexity – the division of the organization implies that there are three distinct horizontal and vertical resolution according to the locations being studied (Robins, 2008).
3.) Centralization – pertains to the density of power density for a formal decision of a manager, a department or an organizational level to be centered and to enable employees to get involved in decisions (Robins, 2008).
The relationship between the organizational structure and the working environment is paramount. Organizations are open systems and they rely on their environment for aid. In general, more sophisticated environments lead to higher differentiation. The usual pattern in organizational structure is to veer away from the mechanistic structures to more organic structures (Hammer, 1993, p. 41). The main benefit is that organizations become more adoptive and dynamic. On the other hand, the disadvantage is that coordination and integration of activities need more initiative and time.
The heightened sophistication of transnational companies marked the need for a new structure which Peter Drucker termed "federal decentralization" in 1974 (Drucker, 1974). In this concept, a company is structured so that there are various independent parts which operate all at the same time. Each unit is independently managed; hence, it has its own autonomous business" (Drucker, 1974, p. 572). This structure led to big conglomerates that have diversified into various departments so as to reduce its risks.
Kolodny (1981) presented the matrix organizational structure which came from project management. It identified a compromise between the traditional bureaucratic strategy and the independent project management technique. A matrix organization has completely created departments that give the inter linkages for project management. The matrix form is impressed on the hierarchical structure and it leads to double authority and greater responsibilities (Kolodny, 1981).
In the 21st century, organizational theorists like Lim, Griffiths & Sambrook (2010) again reiterated that the development of an organizational structure development is strongly linked to the outcomes of the behaviors and approaches of the management and the employees as limited by the power distribution between them. It was also impacted by their externall environmentand outcome.
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